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Khan was born in Mumbai, Maharashtra, the son of former actor Kamran Khan and his wife Menaka Khan née Irani. He has one sister, Farah Khan, who is a choreographer, director, producer and actor. Farah is married to Shirish Kunder, also a producer, editor and director of films. Khan has other connections to the film industry: former actresses Honey Irani and Daisy Irani are his mother's sisters and filmmakers Farhan Akhtar and Zoya Akhtar are his maternal cousins.[2]

Khan completed his primary education from Maneckji Cooper School in Mumbai and then attended Mithibai College to complete his graduation.[3] At age 16, while yet a college student, he started DJ-ing at various parties and social events.

Khan started his directorial career with the movie Darna Zaroori Hai (2006), which had six short stories, in which he directed one story[9] – the story about a man going to watch movie passing through graveyard (starring Manoj Pahwa and Sarita Joshi) called The Graveyard. He then directed Heyy Babyy (2007), his first full-length effort. This was followed by Housefull (2010) and Housefull 2 (2012), all three of which were successful. This was followed by Himmatwala (2013), a critical and commercial failure. His next directorial venture was Humshakals (2014), which is generally ranked amongst the worst Indian films of all time by critics.